Existing home sales drop 5.1% in June
* Existing home sales fell 5.1% to a seasonally adjusted annual rate of 5.37 million in June from 5.66 million in May. That was moderately better than forecasts for a sales rate of 5.1 million.
* Regionally, sales fell in the majority of the country. They dropped 6.5% in the South, fell 7.5% in the Midwest, and tanked 9.3% in the West. Sales rose 7.9% in the Northeast. By property type, single family sales dropped 5.6% while condo and coop sales slipped 1.5%.
* The raw number of homes for sale rose 2.5% to 3.992 million from 3.893 million in May. That was also up 4.7% from year-ago levels. The months supply at current sales pace indicator of inventory shot up to 8.9 from 8.3, led by deterioration in the single family market. Median prices rose 5.2% to $183,700 from $174,600 a month earlier. They're up 1% from the year-ago level.
The housing market continues to struggle in the wake of the tax credit expiration. Sales fell in most of the country in June, while the inventory of homes on the market rose. Home prices were roughly unchanged from year-ago levels, but pricing tends to lag other indicators when conditions head south. Another bout of home price deterioration appears likely, though it'll be much more gradual than what we've seen to date.
I've said it before and I'll say it again: The labor market is absolutely key to the health of housing. Bargains abound in the residential real estate market. But many buyers lack the confidence or the income to take advantage of them. Fed Chairman Ben Bernanke recently forecast a lengthy period of high unemployment. I can't argue with that outlook, and that's why I'm not looking for a robust housing recovery.